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Wednesday, December 05, 2018

ANOTHER NAIL IN UBERS BUSINESS MODEL COFFIN ?

The New York City Taxi and Limousine Commission voted on Tuesday to set a minimum pay rate for drivers who work for app-based companies like Uber and Lyft.

This new rule will go into effect in 20 days, and it will require drivers to be paid at least $27.86 an hour, which translates to $17.22 after expenses. According to a study from TLC, most drivers currently earn around $11.90 an hour. This change increases the yearly earnings of drivers by $9,000.

The New York Taxi Workers Alliance (NYTWA) applauded the change, citing years of activism in hopes of achieving an increase like this. “It’s the first real attempt anywhere to stop app driver pay cuts, which is an Uber and Lyft business practice at the heart of poverty wages,” the NYTWA said.

In a statement, Uber said the new rule would likely lead to fare hikes for users of the ride-hailing service. Uber “supports efforts to ensure that full-time drivers in NYC — whether driving with taxi, limo or Uber — are able to make a living wage, without harming outer borough riders who have been ignored by yellow taxi and underserved by mass transit,” a spokesperson added.

Lyft voiced similar sentiments as Uber, saying, “These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them.”

Via, which already pays drivers a higher-than-minimum wage, supported the move. In a statement to The Verge, the company said, “As the industry leader in driver earnings in New York City, we are looking forward to working with the TLC on implementing this rule.”

This move is only one of several in New York targeting these services. Ride-sharing companies like Uber and Lyft have been facing backlash from New York City officials for the past few years over the number of vehicles allowed on the streets. In August, after a summer of debate, city officials moved to restrict the number of for-hire delivery and transportation vehicles. It was the first city in the country to do so, poking a dent in one of the companies’ most profitable markets.